Home›Insurance›Industry & Deals›Aeolus President: ILS market should be used for strate…

Aeolus President: ILS market should be used for strategic relationships

Aditya Dutt said re/insurance firms can do more than raise capital from ILS investors by building direct relationships that enable conversation about specific transactions across lines including cat and cyber.

Reported · Written up by our desk · Industry & Deals

Aditya Dutt, president of Aeolus Capital Management, said re/insurance firms are underusing the insurance-linked securities, or ILS, investor base by treating it only as a funding source rather than a channel for “strategic possibility.” Artemis reports that Dutt made the point during a webinar briefing presented by broker Aon focused on capital and growth in reinsurance and ILS.

Dutt argued that the industry’s “most overlooked advantage” is the potential for direct relationships between insurance or reinsurance companies and ILS investors. He said the ability to pick up the phone and discuss a specific idea with an investor, or even a sovereign, can differentiate how firms interact with capital sources compared with issuing stock, where counterparties are less directly accessible.

He also pointed to the scale of the investor base in ILS, saying it extends beyond adding new lines of business. Dutt said it is easy to assume the market has not been offered enough casualty or cyber exposure, but he suggested firms have not “scratched the surface” of what participants may be capable of.

During the webinar, Dutt also described third-party capital’s role as “critical,” saying it is growing and expanding in where it takes risk, starting with cat before moving into other areas. Artemis reports he said he is optimistic about partners’ role over the long run.

More like this

Sources